Rupee ends steady despite importer dollar demand

Reuters: The rupee closed steady on Friday as a State-run bank, through which the Central Bank usually directs the market, sold dollars at a flat rate of 133.75 despite demand for the greenback from importers, dealers said.

The rupee closed at 133.75 per dollar, a day after the State-owned bank raised the currency’s peg against the dollar by 25 cents to allow the exchange rate to depreciate to 133.75.

On Monday, the State-owned bank had cut the currency’s peg to the dollar by 10 cents to 133.50.

“There is importer demand and we see little remittances and exporter dollar conversions. So the state bank’s dollar sales help to keep the currency steady,” a currency dealer said. “Everybody is waiting for direction from this month’s (17 August Parliamentary) election.”

Currency dealers said continued foreign outflow from Government securities, at Rs. 16.75 billion ($ 125.29 million) in the week ended 5 August, has also put pressure on the currency.